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Assessment of income from a partnership firm in the hands of a Hindu undivided family, Genuine partnership status, Inclusion of share income of sons in the assessment of the Hindu undivided family. Analysis: The judgment concerns an assessment year where the assessee-Hindu undivided family was engaged in a business of gold and silver ornaments, later taken over by a partnership firm including the karta and his sons. The Income-tax Officer initially deemed the partnership firm as not genuine, including its income in the family's assessment. However, the Tribunal later found the partnership genuine, directing registration and assessing income accordingly. The Revenue contended that the sons' share income belonged to the family, but the Tribunal disagreed, leading to the reference questions. The Tribunal's decision on the partnership's genuineness was crucial, as once established, the sons' share income couldn't be included in the family's total income. The judgment emphasized that the Revenue's argument lacked evidence that the sons' shares belonged to the family, especially after the partnership's registration. The judgment cited precedents to support this position, highlighting the importance of factual findings by the Tribunal in such matters. The Revenue's reliance on previous cases where share income was reassessed due to lack of genuine partnership or contributions was dismissed in this case. The judgment reiterated that the Tribunal's factual findings on the partnership's genuineness and capital contributions were valid and should not be disturbed. It emphasized the distinction between mere name-lenders and working partners, supporting the Tribunal's decision. Ultimately, the judgment answered the reference questions in favor of the assessee-Hindu undivided family, confirming that only the karta's share income was liable for inclusion in the family's assessment. The sons' share income from the partnership firm was deemed not includible in the family's assessment, based on the Tribunal's findings and the lack of evidence supporting the Revenue's contentions. In conclusion, the judgment upheld the Tribunal's decision regarding the partnership's genuineness and the assessment of income, emphasizing the importance of factual findings and evidence in determining the tax liability of a Hindu undivided family in partnership scenarios.
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